President Macky Sall and African Development Bank Group Chief Dr. Adesina call for substantial support for Africa’s low-income countries

Senegalese President and African Union chairman Macky Sall has told development partners of the African Development Fund (ADF) to allow the Fund to tap capital markets for more resources to meet the critical development needs of member countries.

President Sall said: "These are tough times for governments. We need investment and development. Today, youth are raising their voices, demanding employment. They are impatient. Governments must listen and invest more to create jobs and make African economies more competitive. The Fund needs significant financing and should be allowed to go the capital markets."

The Fund is the concessional arm of the African Development Bank Group, supporting the continent's low-income countries.

The Senegalese leader was speaking to representatives of ADF's regional and non-regional member countries and senior management of the African Development Bank Group, who paid him a courtesy call at the presidential palace in the capital Dakar. Dr. Akinwumi Adesina, the bank's president, led the delegation.

The representatives are in Dakar for a two-day meeting to discuss the Fund's 16^th replenishment.

Dr. Adesina thanked President Sall for his leadership of the African Union, representing the continent at major international events to discuss Africa's development.

The bank group head spoke about the transformative impact of the African Development Fund, which is marking 50 years since its inception.

More ADF resources will help Africa address Covid, Climate, and Conflict

Earlier, in remarks at the start of the third ADF-16 replenishment meeting, Adesina said a significant addition of resources would help the Fund address the devastating impacts of Covid-19, rising debt and economic vulnerability, a growing climate change disruption, and the threat of a food crisis triggered by Russia's war in Ukraine.

"Climate change is decimating the ADF countries, triggering even high pressure for migration to Europe in dangerous waters," said the bank group chief, pointing out that nine of the ten countries most vulnerable to climate change are in sub-Saharan Africa, and all are ADF countries.

Recent data shows that Africa receives only 3% of global climate financing. This suggests that if this trend continues, the continent's climate financing gap will reach $100 billion to $127 billion annually through 2030.

Adesina projected that ADF countries would need $500 billion to adapt to climate change up through 2030. If this trend continues, Africa's climate financing gap will reach $100 billion to $127 billion annually through 2030.

"ADF will need a lot more resources, far beyond what donors can provide. So, we must ensure leverage to better resource ADF," said Adesina. He added that if allowed to go into the capital markets, the fund could mobilize an additional $5.5 billion for each of its three-year replenishment cycles.

He termed the Fund a sound and unique institution delivering value for money.

"It has connected 15.5 million people to electricity; supported 74 million people with improved agriculture; provided 50 million people with transport; built or rehabilitated 8,700 kilometers of roads; and provided 42 million people with upgraded water and sanitation facilities."

During the meeting at the presidential palace, President Sall reiterated the need for developed economies to reallocate some of their Special Drawing Rights (SDRs) to Africa.

President Sall stressed that the African Development Bank, a prescribed holder, is best placed to deploy the SDRs to the continent by the end of this year.

Out of the $650 billion announced by the IMF in 2021, African countries were cumulatively allocated just $33 billion.

The bank can leverage the SDRs by three to four times to deliver more support to African countries. The African Development Bank's AAA rating allows it to provide finance to African nations at interest rates that are far more attractive than what they can obtain on their own through commercial financing.

Senegal's minister of economy and planning and cooperation, Amadou Hott, underscored the critical role of the African Development Fund in helping countries address vulnerability. "A strong mobilization of concessional and mixed resources is more essential than ever to support our countries, support their recovery plans, and meet all the challenges they are facing," said Hott, who is also the governor of the African Development Bank for Senegal.

Bolstering food security

The African Development Fund's relevance is also reflected by the African Development Bank Group's extreme agility in responding to hard-hitting crises, such as the launch of the $1.5 billion Africa Emergency Food Production Facility. It is helping to avert a looming food crisis in the wake of the war in Ukraine.

"Within 45 days of launching the facility, the bank had approved $1.13 billion for operations in 24 countries," Adesina explained. He added: "We expect to reach 35 countries at the end of this month, and many of them are ADF countries. The facility, approved by the bank's board of directors this May, targets the production of 38 million tons of food by easing access to fertilizers and climate-resilient seeds for 20 million African farmers."

The Centre for Global Development in May 2021 ranked the African Development Fund the second-best among all 49 concessional financing institutions worldwide.

The replenishment discussions will conclude with a pledge event scheduled for November.

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